Hot Stock Alam Maritim gains 2.75% on 11th YTD contract win

by **Cals** Wed 05 Jun 2013, 11:51

Hot Stock Alam Maritim gains 2.75% on 11th YTD contract win
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Wednesday, 05 June 2013 11:37

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KUALA LUMPUR (June 5): Alam Maritim Resources Bhd’s contract win announced yesterday, its 11th for this year, brought its share price up by as much as four sen or 2.75% in the morning trade.

At 11:22 am, the oil and gas (O&G) services provider shares were up three sen or 2.07% to RM1.48. A total of 2.43 million shares were transacted.

Yesterday, Alam Maritim announced it had won a five-year contract with a two-year extension option and a total value of RM71.54 million.

The contract, which was issued by “an established O&G company”, is for the provision of one unit anchor handling tug supply vessel and will commence in the second half of the year.

On the heels of this development, Kenanga Investment Bank upgraded its target price on Alam Maritim by 21.66% to RM1.91 in a note today.

The research house also maintained an “outperform” rating on Alam Maritim.

“We are pleasantly surprised by the swiftness of the contract awards, as we had expected most of the contracts to only emerge in mid-to-end of the third quarter. Hence, this is an encouraging turn of events and points towards other contracts also being quicker than expected,” said Kenanga analyst Cezzane See in the note.

This was Alam Maritim’s 11th contract announcement this year, which brings its year-to-date contract win value to RM1.13 billion, more than double the total value of last year’s wins.

Kenanga’s See also said that Alam Maritim has an internal target of securing RM2.5 billion in contract value for this year.

“We believe that Alam Maritim's outlook has definitely improved and we are heartened with its continuing wins. The continuing contract awards in the market also signify that there is potential for improvement in 2014 for its offshore installation and CONSTRUCTION [] (OIC) division.”

According to Kenanga’s note, Alam Maritim is trading at 10.6 times calendar year 2014 price-earnings ratio (CY14 PER). The O&G industry’s simple average CY14 PER stands at 14.6 times.